It seems David Tepper's "frigging" "dangerous" market is hitting home as asset managers have greatly rotated their portfolios to hold the most cash in 2 years. Of course, as BAML is quick to point out - this is great "wall of worry" climbing news, "it’s people taking money off the table and playing defensive. There is some inherent buying power." We have now seen almost 6 months of institutional selling and retail investor buying and Bloomberg does a great job rounding up the best market mantras for why it's different this time, and everything is fine.

BofA survey shows that asset manager cash levels are at 2 year highs... (the grey bars) - which of course they see as awesomely bullish

even though that has dipped BAML's risk and liquidity indicator negative for the first time in 2 years...

Today’s bearish investors are tomorrow’s bulls, according to Chris Bouffard, chief investment officer at the Mutual Fund Store in Overland Park, Kansas. Sentiment will improve once the economy rebounds from a weather-related slowdown, he said.

“There is a solid foundation for an advancing market,” Bouffard said by phone on May 15. His firm oversees $9 billion. “We certainly see that cautious stance among pockets of our clients. It’s not because there is any impending sense of doom.

Then there's Bob Doll's Wall of Worry...

“Walls of worry are everywhere,” Robert Doll, who helps oversee $118 billion as chief equity strategist at Nuveen Asset Management in Chicago, told Tom Keene and Michael McKee on Bloomberg Radio’s “Surveillance” on May 14. “This is the least believed bull market that I’ve ever seen. From here it’s earnings, it’s fundamentals, it’s can the economy grow? And my guess is the answer to that question is yes.”

Though some are a little skeptical...

“People are a little bit concerned that something could be on the horizon,” Eric Schoenstein, co-manager of the $5.3 billion Jensen Quality Growth Fund in Portland, Oregon, said by phone on May 15, referring to a potential market crash similar to those that began in 2000 and 2007. “Investors are skittish and that probably makes sense because it lengthens the bull market.”

But there is always the fact that

“When you see this type of downdraft in very visible names, people’s risk averse attitude tends to take over,” Margie Patel, who oversees about $1.4 billion at Wells Capital Management in Boston, said by phone on May 15. “After the economic crisis, a lot of investors were traumatized. People are more looking at preserving their assets.”

So BTFD... just like institutional managers are not... because we need to keep the dream alive

It will all be blamed on the Repubs, and the cursing from folks like yourself will be stripped of the context of what has caused it and used as evidence that their opponents are all just angry incoherent racists. You have the wrong strategy, rather than just get mad and create ammo, you need to let go and try to find a way to profit off it.

We may soon be forced to face our economic Armageddon. The forces that have driven stock markets ever-higher and upward may be beginning to wane. Many markets became distorted years ago when QE and super low interest rates hit the economy in an effort to lessen many of the missteps of recent years.

This has been more helpful in holding up the underlying value of assets and derivatives it now appears than helping to repair a wounded economy. QE has up to now stopped an implosion of derivatives including the resulting contagion and shock that would have spread throughout the financial system. Unfortunately the economy has not fared as well as these asset prices and in many ways these policies have harmed Main Street. More on this subject in the article below.

QE delayed the inevitable and helped the bankers, corporations and power-brokers. I suppose the idea was that that would also help the average Joe, but the average Joe is now so broke he can't pay attention.

Risible. 63% of surveyed investors think global economy is currently in mid-cycle, while a dropping % (from '12 peak) think we are late cycle. Apparently we've been traveling backwards in economic time...

WASHINGTON – As previously announced, in order to help inform the ongoing assessment by the Financial Stability Oversight Council (Council) of risks to U.S. financial stability, the Council will host a conference on the asset management industry and its activities on May 19, 2014. The Council welcomes the opportunity to hear directly from the industry and other stakeholders on topics related to investment risk management, potential risks across the broader financial system, and operational issues and resolvability. Each panel discussion will be moderated by a senior official of a Council member agency.